Over on the far side of the yard is a workshop where they once put the finishing touches to a European Cup trophy. Up the stairs over there a gin distillery is being set up. Round that corner is a man making bicycles.

“And then there are the artists: do you want to meet the artists?” says Stuart Mitchell. “And the photographer’s studio – what about that? And the guitar-maker and Hardware Hackers; they’re very interesting...”

The Portland Works in Randall Street, Sheffield. Picture by Tony Johnson

Backwards and forwards we go, at a cracking pace, criss-crossing the yard at Portland Works, a listed Victorian works where the world’s first stainless steel cutlery was made. It’s in inner-city Sheffield, just up the road from Sheffield United’s Bramall Lane ground. When the city was the world capital of cutlery, it was full of buildings like this. Not any more.

Stuart Mitchell, a knife maker, has spent all his working life at Portland, watching it get gradually more rundown. Seven years ago, the works’ landlord put in a planning application to convert it into student flats. “There was a serious feeling of doom and gloom,” says Mitchell. “A lot of the businesses here were faced with closure.”

Local industrial history enthusiasts were equally alarmed; so many cutlery works had already been demolished or converted to another use. “This was the only one left as a place where people came every day to do their job of work,” says Mitchell. “People thought it was time to put their foot down and not let this one close.”

A community campaign was launched to buy the works and restore it. The campaigners raised £390,000 and bought it in 2013, and Portland is now run as a co-operative with 500 community shareholders and Mitchell as chairman. There are 30 or so small businesses here, renting low-cost workshops, and a waiting list of potential tenants.

Guitar maker Thom Tietzsch-Tyler at his unit in the Portland Works, Sheffield. Picture by Tony Johnson

Restoration is under way – in the process, discovering knives that fell through gaps in floors a century ago – and Portland, holding an open day on April 30, was shortlisted for last year’s English Heritage Awards. “The aim is to keep it as it is, not sterilise it,” says Mitchell. “It needs to look, feel and smell as though people work here.”

It certainly does that. Brick-built, it curves gracefully round a street corner. Through the four-square entrance, you step back a century or so into a yard opening out into a warren of workshops, corrugated iron outbuildings, thick industrial pipes, piles of slates, bits of rusting machinery, and windows blocked with cardboard and newspaper to keep out the cold (optimistic, that).

Narrow passages snake off. Up one staircase is a former rehearsal room once used by the Sheffield bands Def Leppard and Arctic Monkeys. In a corner there’s an old sink planted with snowdrops: a cosy touch in such a solidly urban place. It’s worn and weathered, neither spick nor span, but it speaks to people, eloquently.

“The first time I came, I walked in and thought ‘I want to be part of this’; it was the sense of history,” says Ann Lee, one of “The Tuesday Gang”, the two-dozen volunteers who are helping restore the works. Why? “It’s putting back into Sheffield something that would otherwise be lost.”

She’s restoring a window (there are 250 all-told) with fellow volunteer Donna Bate, who’s equally enthusiastic: “It’s the way steps here have been slightly hollowed where people have been climbing them for generations.”

Some of those people work busily away in Victorian and Edwardian photographs. Women in pinafore dresses hand-polish and burnish silverware, a huge table behind them gleaming with jugs and trays, teapots and tureens. Flat-capped, waistcoated men, sleeves rolled up, forge and grind knives in grim dark workshops. Awful conditions; many died in their forties.

The pictures are part of an archive being built up by works historian Anna de Lange, another volunteer. “When I retired, I wanted to be involved in a heritage project,” she says. “I haven’t the strength to dig out canals or the knowledge to restore engines, so I’ve got Portland Works.”

She unpacks decades-old boxes of stainless steel table knives. The steel’s trade name was Rusnorstain – because, she explains, Robert Mosley, Portland’s founder, said: “Look at these knives – they will neither rust nor stain.”

He opened his works in 1879, bringing together self-employed craftsmen – “Little Mesters” with specific skills – who had traditionally been scattered across the city. Until then, knives and forks generally had to be carted between far-flung forgers, grinders and buffers, but now they just needed carrying across Portland’s yard.

Victorian letterheads show the works with its great chimney smoking prosperously (it’s still there, but was halved in size during the Second World War so it didn’t become a landmark for German bombers).

It was a community, and it has become a community again, blending traditional and modern crafts, artists and small-scale manufacturers.

Stuart Mitchell takes me on a grand tour. Here is John Cherry, setting up a gin distillery – Locksley Distilling Co – in a former polishing room. He currently makes his Sir Robin of Locksley brand in London, but wanted to move back to his native Sheffield.

His enthusiasm for Portland’s “great creative hub” is echoed by bicycle maker Graeme Symington: “The great thing about being here is that you come across all sorts of craftsmen. It’s a hotbed of useful manufacturing knowledge.”

Here is Thom Tietzsch-Tyler, setting up a guitar-making business, but first spending almost a year making the tools he’ll need. Here are artists Mary Sewell and Leslie Wilson, sharing a spacious well-lit studio. Portland, says Wilson, is “a working space where other people are working, too”.

And here is photographer Carl Whitham. “I was looking for studio space,” he says. “And I came down here and fell in love with the place. There’s such a nice community feel here. You’re independent but you don’t feel isolated.”

We end our tour with contrasting industries: tradition and innovation. Peter Ledger is one of Sheffield’s last independent silver-platers. He suspends cutlery in great rectangular tanks of silver cyanide.

He can silver-plate tens of thousands of pieces a week, some of them destined for Claridges and the Savoy. And, 10 years ago or so, he silver-plated the European Cup.

There’s no-one to take over, though, when he retires. “People now want to come to work and leave as clean as they arrive, and not get mucky,” he says. Cutlery has always been a mucky industry. Round the corner is silver polisher Wayne Hewitt, rags wrapped round his fingers as he presses knives onto a buffing wheel. His face is streaked with black.

Just along the yard is Sheffield Hardware Hackers and Makers, a self-styled “do-ocracy” embodying clean, modern industry. “We’re a hackspace,” says trustee AJ Ibbotson. I look blank. “A non-profit organisation where people have access to tools and machinery they wouldn’t necessarily have at home.” He talks about raspberry pie. I later discover it’s actually Raspberry Pi – “a computer about the size of a credit card with a graphical interface”.

The Portland Works project has had financial help from individuals and businesses, as well as the Architectural Heritage Fund, the European Regional Development Fund and the J Paul Getty Jr Charitable Trust. But there’s still a great deal of work to do and a need for money to pay for it.

Stuart Mitchell brims with enthusiasm for the project. “Portland Works is part of me,” he says, gazing round the yard. “I’ve never known anything else. It’s authentic and... proper.”

• Portland Works (portlandworks.co.uk), Randall Street, Sheffield, is holding a public open day on Saturday, April 30. 11am to 3pm, free admission.